Currently, Uruguay stands out in Latin America for its success as an equitable society and its high per capita income, low poverty rate and absence of extreme poverty. As a percentage of the total population, Uruguay has the largest middle class in the region. It has achieved high ratings on several measures of well-being, such as the Human Development Index, the Human Opportunity Index and the Economic Freedom Index.
The stability of the country’s institutions and low levels of corruption are reflected in the high level of citizens’ trust in government. According to the World Bank’s Human Development Index, Uruguay has achieved a high level of equal opportunity in terms of access to basic services such as education, clean water, electricity and sanitation.
In July 2013, the World Bank ranked Uruguay as a high-income country with a gross national income per capita of US$ 16,810 in 2014. With an average annual growth rate of 5.2 % between 2006 and 2014, Uruguay’s strong economic performance has enabled the country to withstand external shocks.
Uruguay’s economic growth over the past decade was inclusive and led to a significant reduction in poverty and the expansion of shared prosperity.
Moderate poverty declined from 32.5% in 2006 to 9.7% in 2014, whereas extreme poverty has practically disappeared: from 2.5% to 0.3% during the same period. In terms of equality, the income of the poorest, 40% of the Uruguayan population increased 5.78% between 2003 and 2013. Inclusive social policies have increased coverage of social programs. For example, approximately 87% of the population over age 65 is covered by the pension system: this figure is among the highest in Latin America and Caribbean, along with those of Argentina and Brazil.
The sound macroeconomic performance also was reflected in the labor market, which recorded historically low unemployment rates in 2014 (6.6 %), althouth given the current slowdown this has increased to 7.4% in June 2015. Moreover, export markets have diversified in an effort to reduce dependency on the country’s main trade partners and currently 77% of exports go to 15 different markets.
Uruguay implements prudent macroeconomic policies. Annual GDP growth was 3.5% in 2014. The gross public debt ratio experienced a marked declined (63.6% of GDP in 2014 versus 75% in 2006), as did the net ratio (21.6% of GDP in 2014 as compared with 70% a decade earlier).
Despite significant advances in reducing the debt, it remains relatively high. While Uruguay has diversified trade, a large share of exports to its regional partners, mainly Brazil (18% in 2014) placing the country in a vulnerable position.
For more information on Uruguay, visit the World Bank’s Open Data site.
Last Updated: Sep 25, 2015